Analysis of Trades and Tips for Trading the European Currency
A test of the 1.0830 price level occurred when the MACD indicator began to move up from the zero mark, confirming a correct entry point for buying euros. As a result, the pair rose by only 5 points. The euro completely ignored the fact that the Eurozone GDP for the quarterly period was better than economists' forecasts, indicating a clear lack of interest in this risky asset ahead of the Federal Reserve meeting. In the second half of the day, we expect data on the U.S. Consumer Confidence Index, the S&P/Case-Shiller 20-City Home Price Index, and the Housing Price Index. The pair may react to these figures, and good numbers could bring back pressure on the euro. If there is no reaction, we are likely to continue trading within the channel. As for the intraday strategy, I plan to act based on the implementation of Scenario 1 and Scenario 2.
Buy Signal
Scenario 1: Today, I plan to buy euros upon reaching the 1.0844 level (green line on the chart) with a target of rising to the 1.0862 level. At 1.0862, I will exit the market and also sell euros in the opposite direction, targeting a 30 to 35 point move from the entry point. A strong upward move in the euro today can only be expected after very weak U.S. statistics, though even that is unlikely. Important! Before buying, ensure that the MACD indicator is above the zero mark and has just begun to rise from it.
Scenario 2: I also plan to buy euros today in case of two consecutive tests of the 1.0827 price level when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to a market reversal upwards. Growth can be expected to the opposite levels of 1.0844 and 1.0862.
Sell Signal
Scenario 1: I will sell euros after reaching the 1.0827 level (red line on the chart). The target will be the 1.0806 level. I plan to exit the market and buy euros immediately in the opposite direction (targeting a 20 to 25 point move in the opposite direction from the level). Pressure on the pair will return in case of an unsuccessful correction to the 1.0844 level and strong U.S. statistics. Important! Before selling, ensure that the MACD indicator is below the zero mark and has just begun to decline from it.
Scenario 2: I also plan to sell euros today in case of two consecutive tests of the 1.0844 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline can be expected to the opposite levels of 1.0827 and 1.0806.
Chart Explanation:
Thin green line – entry price where the trading instrument can be bought.Thick green line – the estimated price where Take Profit orders can be placed, or profits can be fixed manually, as further growth above this level is unlikely.Thin red line – entry price where the trading instrument can be sold.Thick red line – the estimated price where Take Profit orders can be placed, or profits can be fixed manually, as further decline below this level is unlikely.MACD indicator. It is important to consider overbought and oversold zones when entering the market.
Important. Beginner forex traders should be very cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sharp exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You need to set stop orders to avoid losing your entire deposit, especially if you do not use money management and trade large volumes.
Remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
